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Americans’ 401(k) plans: An untapped source for tax revenue?

As Washington debates what to do about the fiscal cliff that it foolishly created, many potential sources of new revenue will be thrown on the table. One of them is likely to be 401(k) plans. …

But many in Washington see our investment accounts not as the expressions of well-planned, disciplined decisions but as untapped reservoirs of wealth they can drain to fix the problems that they caused.

The tax protection that 401(k)s have now can be wiped out by grasping politicians who refuse to do what’s right, which is to severely cut spending. …

President Obama’s National Commission on Fiscal Responsibility and Reform, for instance, proposed lowering the cap on the amount workers could place in their 401(k)s without incurring taxes.

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I agree with some of your points, but it would be harmful to wildlife conservation, which depends partly on large donations of conservation easements, the kind of gift that inly large landowners can give. Many of these landowners are not extremely wealthy in cash, but want to keep their land together for future generations. That conservation tool will pretty much go away if the charitable deduction goes away. So I would think that liberals would want to keep it, if only for environmental reasons.

You have one professor at a proudly radical school. Hardly a groundswell.

urban elitist on November 30, 2012 at 2:17 PM

I doubt that the Democrats socialists could ever get legislation passed that threatens our 401ks but I guarantee you that many if not most of them would like to. It plays perfectly into their class warfare and envy rhetoric.

Yeah… IOW, screw those needy people who benefit from all of the voluntary charitable giving that will dry up. It will give big brother government more tax revenue to spend. So send them to the government social services offices instead. Just leave my 401k alone.

The flaw there is that the additional revenue is supposed to cut the deficit and not fund new spending, right?

I guess those poor people who benefited from the voluntary charitable giving that will dry up are just sh!t-out-of-luck. Small price to pay if it means the government leaves his 401k alone.

When you take a tax deduction for a charitable contribution you are being subsidized as surely as if someone wrote you a check.

urban elitist on November 30, 2012 at 2:10 PM

No, no it’s not as if someone wrote me a check. Any deduction I take is decreasing the amount of MY money that the government takes from me. It’s MY money to begin with, ‘allowing’ me to keep MY money isn’t any more a subsidy than allowing me to keep MY kidney is a transplant.

Besides not paying those pesky taxes, Mr. Rangel had other reasons for wanting to hide income. As the tenant of four rent-stabilized apartments in Harlem, the Congressman needed to keep his annual reported income below $175,000, lest he be ineligible as a hardship case for rent control. (He also used one of the apartments as an office in violation of rent-control rules, but that’s another story.)

Mr. Rangel said last fall that “I never had any idea that I got any income’’ from the villa. Try using that one the next time the IRS comes after you. Equally interesting is his claim that he didn’t know that the developer of the Dominican Republic villa had converted his $52,000 mortgage to an interest-free loan in 1990. That would seem to violate House rules on gifts, which say Members may only accept loans on “terms that are generally available to the public.” Try getting an interest-free loan from your banker.

The National Legal and Policy Center also says it has confirmed that Mr. Rangel owned a home in Washington from 1971-2000 and during that time claimed a “homestead” exemption that allowed him to save on his District of Columbia property taxes. However, the homestead exemption only applies to a principal residence, and the Washington home could not have qualified as such since Mr. Rangel’s rent-stabilized apartments in New York have the same requirement.

Missouri Democratic Sen. Claire McCaskill admitted Monday that she had failed to pay about $287,000 in back taxes and will sell a private plane that has created considerable controversy as she prepares to run for a second term in 2012…..

The tax revelations are the only the latest problem for McCaskill involving the plane,however.

In the wake of a Politico report that had billed the government for her travel on the aircraft, she quickly reimbursed taxpayers for the trips, hoping to avoid a protracted political problem.

But, it was then revealed that she had billed taxpayers for a purely political trip — deepening her potential exposure on the issue.

Now, back taxes have been a problem for the Obama-Biden administration. You may recall early on that Tom Daschle was the president’s top pick to run the Health and Human Services Department. But it turned out the former Democratic senator, who was un-elected from South Dakota in 2004, owed something like $120,000 to the IRS for things from his subsequent benefactor that he just forgot to pay taxes on. You know how that is. $120G’s here or there. So he dropped out.

And then we learned this guy Timothy Geithner owed something like $42,000 in back taxes and penalties to the IRS, which is one of the agencies that he’d be in charge of as secretary of the Treasury. The fine fellow who’s supposed to know about handling everyone else’s money. In the end this was excused by Washington’s bipartisan CYA culture as one of those inadvertent accidental oversights that somehow never seem to happen on the side of paying too much taxes.

And under Geithner’s expert guidance the U.S. economy has been, well, wow! Just look at it.

Privacy laws prevent release of individual tax delinquents’ names. But we do know that as of the end of 2009, 41 people inside Obama’s very own White House owe the government they’re allegedly running a total of $831,055 in back taxes. That would cover a lot of special chocolate desserts in the White House Mess.

Of course, urban elitist has already admitted that he and his “wife” are on food stamps illegally, so it’s no surprise that they’re also cheating on their taxes like their owners.

In a thread about taxing 401Ks urban troll started talking about eliminating the tax deduction for charitable giving. It seemed a little concerned about its 401k, enough to start researching how serious this proposal might be.

According to the link, she’s at The New School. Many if not most of my friends have 401ks that they’re counting on. And, given that our “class warfare” – as you childishly put it — is aimed at he relatively small 1 percent, we recognize the importance of 401 k plans to the middle class.

And, finally,how come all the sudden farsighted is eager to subsidize charities that are run so poorly that no one will donate to them without a tax deduction?

No, no it’s not as if someone wrote me a check. Any deduction I take is decreasing the amount of MY money that the government takes from me. It’s MY money to begin with, ‘allowing’ me to keep MY money isn’t any more a subsidy than allowing me to keep MY kidney is a transplant.

StompUDead on November 30, 2012 at 2:31 PM

The problem you have to recognize, StompUDead, is that urban elitist doesn’t actually pay taxes; thus, whenever he gets a check from the government, he IS being subsidized. He’s getting more out than he paid in. The government is literally writing him a check for doing nothing.

His admitting that he receives more in refunds than he pays in taxes demonstrates the point. Obama supporters are moochers and looters who need to have their taxes hiked so that they are actually paying something.

And after all, urban elitist says that hiking taxes will not affect the economy, so let it be proven.

A deduction reduces a taxpayer’s taxable income by that amount. It doesn’t remove anything from government coffers. It’s not a drain, unlike tax credits (giveaways like the Chevy Volt’s incentive) which do have “to be made up from other sources — you and I” and physically paid out.

Urbanelitist thinks like the professor from the “proud racial” school. She thinks our money belongs to the government first and they merely decide what we are allowed to keep.

jawkneemusic on November 30, 2012 at 2:30 PM

That’s exactly what socialists think. Socialists think all income is collectively earned and all wealth is really collectively owned. Personal ownership is really an illusion, a privilege granted by the government.

It’s the job of a socialist government to distribute the collectively earned income and wealth “fairly”. Government ultimately decides and is the final arbiter of who gets what, in the interest of “social justice” and economic equality.

According to the link, she’s at The New School. Many if not most of my friends have 401ks that they’re counting on. And, given that our “class warfare” – as you childishly put it — is aimed at he relatively small 1 percent, we recognize the importance of 401 k plans to the middle class.

urban elitist on November 30, 2012 at 2:32 PM

And yet you’re still planning on confiscating them anyway.

Your Obama Party screams and rants that 401(k) and tax-advantaged retirement plans are giveaways to the rich, and that anyone who takes advantage of them is an unpatriotic tax cheat.

So you admit that you and all of your “friends” are unpatriotic tax cheats.

And, finally,how come all the sudden farsighted is eager to subsidize charities that are run so poorly that no one will donate to them without a tax deduction?

urban elitist on November 30, 2012 at 2:32 PM

So you acknowledge that Obama Party organizations like Media Matters are run poorly, since they have to entice people with tax deductions?

This is why we have to Let It Burn. Watching the desperate liars like urban elitist get smoked by their idiot Marxist rulers that they put into power will be made even sweeter by the fact that they are literally going to starve. Urban elitist and his worthless “wife” have no marketable skills; they just collect government checks.

It’s funny watching the desperate shills like urban elitist who aren’t able to earn money themselves try to get it through the Obama Party.

They really do hate producers, don’t they? We shame them every day. We work, we have valuable skills, and people will pay us; meanwhile, they wallow in OWS filth, whining about how employers won’t pay people with transgender studies degrees who show up three hours late and hungover, then have to leave by 2 to get to the pot dispensary.

A few years ago I started tracking my company’s sales as related to the stock market. The trend closely mirrors market. My customers are middle and upper-middle class and they pay a lot of attention to their 401k statements. If they get their monthly statement and see it decrease by 15 grand, they’re sure as heck going to put off a purchase even though their disposable income has not changed a penny.

There are 50 million 401ks in this country. Those accounts are often a family resource, so they are tied to more than 50 million people. That’s a lot of people to piss off and I do think they’ll be paying attention because it directly affects them. This is not some abstract tax on millionaires. It’s pulling money out of the pockets of the middle class.

The problem you have to recognize, StompUDead, is that urban elitist doesn’t actually pay taxes; thus, whenever he gets a check from the government, he IS being subsidized. He’s getting more out than he paid in. The government is literally writing him a check for doing nothing.

His admitting that he receives more in refunds than he pays in taxes demonstrates the point. Obama supporters are moochers and looters who need to have their taxes hiked so that they are actually paying something.

And after all, urban elitist says that hiking taxes will not affect the economy, so let it be proven.

northdallasthirty on November 30, 2012 at 2:34 PM

Ahhhh, gotcha. I didn’t realize I was conversating with someone who perpetually rides the gravy train.

I, by the, never admitted to getting more refunds than I’ve paid in taxes, because it is t true. And I’ve never received government cash benefits at all.

The New School defines itself as being radical. That I use the term”proudly” does not mean I support every or any theory that one of its professors spouts.

If your taxes are reduced because of your chatitable giving, your charitable giving is by definition being subsidized.

To be clear, in this argument I am argui g for people to be able to keep the money the have earned a d saved in their retirement accounts, while many embracing government subsidies designed to influence your spending patterns in the direction of nonprofit organizations.

If your taxes are reduced because of your chatitable giving, your charitable giving is by definition being subsidized.

urban elitist on November 30, 2012 at 2:46 PM

No, by definition, my charitable giving is not being subsidized.

sub·si·dy/ˈsəbsidē/
Noun:
1.A sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service…
2.A sum of money granted to support an arts organization or other undertaking held to be in the public interest.

The government isn’t giving or ‘granting’ me any money to pay for that charitable donation. They’re not taking someone else’s tax money to help me pay for it. I’m paying for it with MY money. Money that until I file my tax paperwork belongs to me ALONE. There is no claim to the money I earn until I release it to the government.

i’m going to have to agree with urban here. The tax code is pernicious and leads to loads of unintended consequences.

Charity is one example…i agree. Home mortgage deductions have done lots of damage…the joys of home ownership are now being played out…and that include labor mobility. A large percentage of people are better off renting…there’s nothing immoral about renting…(unless you are a marxist and hate the rentier class)

Not-for-profit status is often a scam. And yeah, that included a lot of universities. And can we talk about Churches…and freedom of worship…better to be free than to be tied to the government.

Tax deductions hide the true cost of government, shifting to someone else. College deductions? That’s working out real well.

Whenever a bright bulb in DC has a deduction for someone (his business buddy or your family) he is buying your vote.

You must be pretty happy with the Obama era the, Reaganwasright, because 401 k s indexed to the Dow and S&P have had double digit growths d dry year since Obama took office

urban elitist on November 30, 2012 at 2:57 PM

You should probably consider abandoning this thread soon. The more you post the more you prove you have little to no understanding of finances, taxes, or stock market gains:

Suppose you hold a stock that falls 50% in value. How much does that stock have to gain before you’re back where you started? Many people instinctively say 50%, but that’s wrong. If the stock’s price starts at $10 and loses 50%, it’s at $5; from there, gaining 50% would put it only back up to $7.50. To get back to $10, the stock would have to gain 100%, twice as much as it lost in percentage terms.

When the government cuts your tax bill, it is the equivalent of a cash grant and hence a subsidy.

urban elitist on November 30, 2012 at 3:19 PM

Again NO! It’s not a subsidy because it was never their money to start with. Your problem is you fail to understand that very simple point. Your starting assumption is incorrect so every one of your conclusions derived from that assumption is, by extension, incorrect.

My tax bill, if I pay ANYTHING > $0.00 to the government is me subsidizing the government. If my tax bill is lower because of a deduction, and I’m still paying a + monetary value to the government, it’s still not a subsidy because that money began and ended as mine. It never belonged to the government to grant back to me.

When the government cuts your tax bill, it is the equivalent of a cash grant and hence a subsidy.

urban elitist on November 30, 2012 at 3:19 PM

WTF????

Again NO! It’s not a subsidy because it was never their money to start with. Your problem is you fail to understand that very simple point. Your starting assumption is incorrect so every one of your conclusions derived from that assumption is, by extension, incorrect.

StompUDead on November 30, 2012 at 3:29 PM

Absolutely. Alas, liberals have no common sense and they actually believe everything they’ve been told by the left.

What exactly about the “bush years”????? This is totally seriousness. I mean, obama does actually believe this…he just says to get his base chanting his name..(hey, urban, have you ever been at one of those things and chanted O.ba.ma, O.ba.ma….?

i always wondered if it was really cool…kind of like ‘Ommmmmmmmmmm’ in a big group of people

The minute they tap my 401k, I will no longer have any reason to abide by the rules. Even cratering the stock market a decade ago, I still had some hope it might let me live for a year or two, free of constraints. Going Galt gets closer and closer…….